Divorce, Business Succession Planning

Divorce and Business Succession Planning

Oftentimes the triggering events for a business include involuntary distributions. And again, an involuntary distribution may be in fact a divorce situation whereby that stock is a marital asset and as a marital asset that is subject to a court’s distribution to the couple.

And again, depending on the business situation, you may be in partnership with somebody. He has 40%, you have 60% and if you are truly concerned about the business you don’t want your partner to have your ex-wife be a 20% or 30% owner and that’s why a buy/sell agreement or redemption agreement that has those clauses in it about a triggering event including an involuntary distribution trigger a means by which cash can be used to buy out that otherwise significant portion of the ownership.